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O-I Glass (OI) Up 0.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O-I Glass due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
O-I Glass Beats Q1 Earnings Estimates, Lowers '24 Outlook
O-I Glass reported first-quarter 2024 earnings per share of 45 cents, which beat the Zacks Consensus Estimate of 36 cents. On a year-over-year basis, earnings plunged 65%, reflecting lower volumes due to weak consumer demand and inventory destocking across the value chain.
Operational Update
Revenues were $1.59 billion for the quarter under review, down 13% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $1.71 billion. The downside was driven by lower segmental operating profit and higher interest expenses.
Cost of sales was down 5.3% year over year to $1.28 billion. Gross profit decreased 34.3% year over year to $318 million. The gross margin was 20% for the quarter under review compared with 26.4% in the prior-year quarter. Selling and administrative expenses were down 16.3% year over year to $123 million.
Adjusted segment operating profit amounted to $235 million for the reported quarter, down from the prior-year period’s $398 million. The segmental operating margin was 14.8% compared with the prior-year quarter’s 21.7%.
Segmental Performances
Net sales in the Americas segment dipped 14.6% year over year to $854 million for the first quarter. We expected net sales of $960 million for the quarter. Operating profit was down 42% year over year to $102 million. Our estimate was $98 million. The downside is due to lower net price and lower sales volume.
Net sales in the Europe segment were $709 million for the reported quarter, down 11.3% year over year. Our estimate for the segment’s net sales was $726 million. The segment’s operating profit fell 40.1% year over year to $133 million due to lower sales volume and significantly higher operating costs. We expected the segment's operating profit to be $123 million for the quarter.
Financial Update
O-I Glass had cash and cash equivalents of $395 million at the end of Mar 31, 2024, down from the $913 million at 2023-end. The company used $270 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $193 million.
OI’s long-term debt was $4.12 billion as of Mar 31, 2024, down from $4.7 billion as of Dec 31, 2023.
Outlook
Due to the headwinds faced in the first quarter of 2024, OI lowered its projection for 2024. It expects adjusted earnings of $1.50-$2.00 per share, down from previously stated $2.25-$2.65. Sales volume (in tons) is projected to be flat to up in the low-single digits. OI expects the 2024 free cash flow to be $100-$150 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -45.33% due to these changes.
VGM Scores
At this time, O-I Glass has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise O-I Glass has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
O-I Glass belongs to the Zacks Glass Products industry. Another stock from the same industry, Apogee Enterprises (APOG - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended February 2024.
Apogee Enterprises reported revenues of $361.84 million in the last reported quarter, representing a year-over-year change of +5.2%. EPS of $1.14 for the same period compares with $0.86 a year ago.
For the current quarter, Apogee Enterprises is expected to post earnings of $1.12 per share, indicating a change of +6.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Apogee Enterprises. Also, the stock has a VGM Score of A.
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O-I Glass (OI) Up 0.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O-I Glass due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
O-I Glass Beats Q1 Earnings Estimates, Lowers '24 Outlook
O-I Glass reported first-quarter 2024 earnings per share of 45 cents, which beat the Zacks Consensus Estimate of 36 cents. On a year-over-year basis, earnings plunged 65%, reflecting lower volumes due to weak consumer demand and inventory destocking across the value chain.
Operational Update
Revenues were $1.59 billion for the quarter under review, down 13% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $1.71 billion. The downside was driven by lower segmental operating profit and higher interest expenses.
Cost of sales was down 5.3% year over year to $1.28 billion. Gross profit decreased 34.3% year over year to $318 million. The gross margin was 20% for the quarter under review compared with 26.4% in the prior-year quarter. Selling and administrative expenses were down 16.3% year over year to $123 million.
Adjusted segment operating profit amounted to $235 million for the reported quarter, down from the prior-year period’s $398 million. The segmental operating margin was 14.8% compared with the prior-year quarter’s 21.7%.
Segmental Performances
Net sales in the Americas segment dipped 14.6% year over year to $854 million for the first quarter. We expected net sales of $960 million for the quarter. Operating profit was down 42% year over year to $102 million. Our estimate was $98 million. The downside is due to lower net price and lower sales volume.
Net sales in the Europe segment were $709 million for the reported quarter, down 11.3% year over year. Our estimate for the segment’s net sales was $726 million. The segment’s operating profit fell 40.1% year over year to $133 million due to lower sales volume and significantly higher operating costs. We expected the segment's operating profit to be $123 million for the quarter.
Financial Update
O-I Glass had cash and cash equivalents of $395 million at the end of Mar 31, 2024, down from the $913 million at 2023-end. The company used $270 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $193 million.
OI’s long-term debt was $4.12 billion as of Mar 31, 2024, down from $4.7 billion as of Dec 31, 2023.
Outlook
Due to the headwinds faced in the first quarter of 2024, OI lowered its projection for 2024. It expects adjusted earnings of $1.50-$2.00 per share, down from previously stated $2.25-$2.65. Sales volume (in tons) is projected to be flat to up in the low-single digits. OI expects the 2024 free cash flow to be $100-$150 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -45.33% due to these changes.
VGM Scores
At this time, O-I Glass has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise O-I Glass has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
O-I Glass belongs to the Zacks Glass Products industry. Another stock from the same industry, Apogee Enterprises (APOG - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended February 2024.
Apogee Enterprises reported revenues of $361.84 million in the last reported quarter, representing a year-over-year change of +5.2%. EPS of $1.14 for the same period compares with $0.86 a year ago.
For the current quarter, Apogee Enterprises is expected to post earnings of $1.12 per share, indicating a change of +6.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Apogee Enterprises. Also, the stock has a VGM Score of A.